For most entrepreneurs who are planning to set up their LLC in the USA, the major concern is the costs of forming it.
We all know that the USA is not an economical place to start a business. Yet the reason why it serves as the perfect spot for the majority of startups and small firms is that no matter which business you choose, it’s gonna give you a large profit if it is based in the USA as an LLC, therefore most of the business owners always prefer to go for it.
However, even though you have made up your mind to set up your LLC in the USA, it’s better to consider the costs of forming it, so that you can put the basis of your business in a more calculated way.
So let’s have a look down below, where we have discussed in detail the costs of LLC formation depending upon the methods you choose to do so, as well as all the other minor details to give you a better vision.
Setting Up an LLC in the USA – Different Methods and Their CostsOne of the good things about LLC formation is that it gives you an array of choices. You get to decide how you want to set it up, either by yourself, by hiring a lawyer or opting for an LLC formation service. Each of the methods differs in its budget range. So let’s discover which one is the most feasible option for you.
LLC Formation via Online Service ProvidersOnline LLC formation platforms are mostly considered the first option by many, due to the convenience they provide to their customers.
These online service providers often come up with a range of different packages starting from the basic to premium ones, each package including a set of various services. Though the cost for all the packages differs depending upon which high valued LLC Services you choose, they can cost you from $39 to $900 plus the state fee.
LLC Formation via Hiring a LawyerHiring a Lawyer or attorney for LLC formation is also a considerable option for startups. A lawyer will not only help you file your Articles of organization with the secretary of state, but will also provide you with professional legal advice regarding your business along with covering many other aspects like preparing operating agreements, applying for EIN, etc.
As the lawyer will deal with all the matters of LLC formation, thus freeing you from extra hassle, it is going to cost you at least $1000 to $15000.
DIY LLC FormationDIY LLC formation means that you and your partners (if any) would have to carry out the whole process of LLC formation on your own, from the filing of articles of organization to acquiring a business identification number.
The only fee that you would have to pay in DIY LLC formation will be the state filling fees depending upon the state you chose for your LLC that can range anywhere from $40 to $500.
Individual Costs per Segment of LLC FormationAll the aspects involved in forming LLC have their own individual charges that may vary according to the state:
Filing for Articles of OrganizationAlthough, each state in the USA has its own rules as per which they charge for filing the articles of organization with the secretary of state. However, normally, the fee for filing articles of organization often lies anywhere between $50 to $250.
Business Name RegistrationBusiness name registration or reservation is an entirely optional aspect of LLC, which means it depends upon you whether you want to reserve it in advance or not as it is not included in the necessities of LLC formation. The cost for reservation of your LLC name is $10 to $50, varying according to the state.
Acquiring a Business LicenseAcquiring a business license is a must for setting up your LLC, however, the charges for obtaining one are not that high. It will only cost you $50 to $100 to apply for and obtain your business license. Keep in mind that requirements for a business license can differ depending upon the state, which means the costs will also vary accordingly.
Obtaining Employer’s Identification Number (EIN)Employers Identification Numbers is also another important aspect of forming an LLC as you’re gonna need them to open your business account and file your LLC tax returns.
If you already have one, then no need to apply for the second time. However, if you still haven’t got it, then you can apply for it anytime for free. It won’t even cost you $0.
Annual Fees and Dues for Setting up LLCApart from the above aspects, there are a few dues and fees that you will have to pay annually after setting up your LLC so that it can remain in good health. The annual fees of LLC formation in the USA are:
Registered Agent FeeThe facility of registered agents often comes for free (but only for one year) if you choose to go with an online service provider. However, if you opt for a DIY method or hiring a lawyer, then you’ll have to pay the registered agent fee every year that is $100 to $300
Annual LLC Report FeeIn order to keep all the information of your LLC contemporary, you’re gonna have to file your articles of the organization every one to two years. This process is called Annual LLC report submission and it costs nearly around $20 or can even extend up to $200, depending upon the requirements of the state.
Franchise TaxOnly a few states in the USA charge a small amount of tax on your LLC which is often called franchise Tax. The amount of tax entirely depends upon the state you have chosen and may differ for each state.
The Bottom LinesSo, after inspecting the above discussion, it is conclusive that forming an LLC in the USA is not an expensive process at all, and can only cost you an average of $150 to $200.
However, in some circumstances, this amount can get bigger depending upon the demands of your respective state. So you have to make sure to choose the right state for setting up your LLC to successfully meet your goals and budget, both at the same time.